Business VoIP Cost per User

Your company’s phone system is end-of-life, and you’re shopping for a new one. You’ve done some research and it seems like business VoIP (aka Hosted PBX), might be the way to go, but how much does it cost per user?

Your company has a lot of phone system extensions. Is this going to cost a fortune?

In this video, AeroCom President, Mike Smith, explains the three primary ways that business VoIP is priced, on a per user basis:

1. Bundled
2. Unbundled
3. Call-path-only

Mike also gives you a quick summary of the types of companies that each type of pricing will fit, best.

Want to know how much the phone hardware costs? He covers that too!

Want Mike’s recommendation on the best vendors to quote? Click below.

Ask Mike

About Mike
Mike Smith is the Founder and President of AeroCom and has been helping companies with telecom and cloud services since 1999. He has been the recipient of numerous business telecommunications industry awards and in 2011, he was honored as one of the top 40 business people in Orange County, CA., under 40 years old. Follow Mike on LinkedIn, Twitter or SpiceWorks.

Transcript:

Okay, so one question I get asked a lot is, how much does hosted VoIP cost per user, for businesses? So it’s a little bit of a complicated answer but not too bad. I’ll try to simplify it for you. So obviously, hosted VoIP’s going to cost differently depending on the hosted VoIP service provider that you’re quoting. But you’ll see a lot of trends out there, a lot of similar companies in terms of pricing-wise. What I do, is I like to group it into some different categories.

The first, most common type of pricing you’ll see out there, I call it bundled pricing or traditional pricing. And the way that works is, the reason I call it bundled is because every user license is bundled with a simultaneous call path. So if you’re purchasing hosted VoIP for 100 users, you’re going to get 100 simultaneous call paths. So that’s why they’re call bundled. The call path is included. It’s bundled in with every user license that you purchase on a monthly basis. And the way that pricing works is it’s typically between $15 a month per user to around $30 per month per user. Why such a big gap? Well, number one, it depends on your volume discount. If you have 5,000 users, you’re obviously going to get a lot lower pricing than if you have five users.

So volume discount will factor in as well as feature needs. So if your users need very little features, like they just need to pick up the phone and make a couple of calls and transfer calls, that they don’t need much, that’s going to be closer to the $15 per month range per user. But if they need the full gamut, like they need software integration, they need conferencing at a high level, they need all kinds of bells and whistles, they’re going to be at the higher range. So $15 to $30 per month per user for traditional bundled hosted VoIP pricing. If you have common area phones like phones that need a live extension, like a conference room, but they don’t need voicemail, they’re not attached to a specific user, those are going to be discounted at maybe $10 per month per extension, $10 to $15 per month per extension. So that’s bundled traditional pricing.

The second type of pricing is what I call unbundled pricing. It’s just like I mentioned with bundled pricing. The opposite of that, it’s unbundled from call paths, so your user licenses are going to be unbundled from call paths so that you’re going to purchase call paths separately than users. So for instance, if you have 100 users in your company, you’re going to purchase the licenses for 100 users, which is going to be a per month per user charge, and then you’re going to purchase call path separately based on the amount of simultaneous calls your company has taken place at the busiest time of day.

Average for a company of about 100 users is probably around 20 call paths. So you would purchase 100 user licenses and 20 call path licenses. Those would be unbundled separate charges. The range for that is about $5 to $10 per month per user. And call paths are typically around $20 to $30 per month per call path. And with that type of pricing, common area phones, like conference rooms and lobby phones, things like that, are typically not discounted a whole lot. They’re usually about the same cost as a user, about $5 to $10 per month per user.

The last type of pricing that you’ll see out there for hosted VoIP on a per user basis is what I call call-path-only pricing. There’s only a few of these service providers out there, but what they do is they only charge for simultaneous call paths, and they allow you to have unlimited users for free. So they charge a more expensive rate for the call paths, like around $40 per month per call path, and then they allow you to have as many users as you need. So for instance, if you had 100 employees or 1,000 employees in your company, it wouldn’t really matter. It just depends on how many simultaneous calls your company’s going to have at the busiest time of day, and you would pay around $40 per month per simultaneous call path.

So as you can ascertain by the different models, if your company’s on the phone a lot, you’re probably going to fit best into the first type of pricing, what I call traditional pricing, where a call path is included with every single user. It just makes sense. You’re almost using the amount of call path to where it doesn’t make any difference in terms of pricing. Now if you have a large company with hundreds or thousands of employees, you’re probably going to fit best in unbundled pricing or call-path-only pricing for obvious reasons. And then in terms of hardware, how much does hardware cost? Well, hardware, you can either rent hardware, or you can lease to own the hardware, or you can buy it outright.

So that’s the different options on hardware. I hope that helps. That’s a little outline on how much hosted VoIP costs on a per user basis. If you have any questions, feel free to reach out, give me a call (714-593-0011), shoot me an email. I’m happy to help. Have a great day.